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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Restrictions: pre-entry loss: time-apportionment: additional consideration

The rule in para 2(4) Schedule 7A does not apply for the purpose of computing any indexation allowance on the expenditure, in relation to disposals before 30 November 1993. So if, in the example in CG47664, there was a disposal of the shares before 30 November 1993, £0.4M of the 1985 expenditure, and £0.2M of the 1990 expenditure, would be indexed from the time of the rights issue in 1992.

Note: Additional rules relating to loss buying were enacted in FA 2006. See CG47020+ for guidance on the rules which apply in priority to TCGA92/SCH7A for accounting periods ending on or after 5 December 2005.

FA11/S46 and FA11/SCH11 greatly simplified the rules in TCGA92/SCH7A for the deduction of losses on or after 19 July 2011. See CG47400+ for guidance on loss streaming from that date.